thependulumswings

After taking two flights, and driving through four states, and staying eight days in three different hotels, our summer vacation ended all too soon.  Good times were had by all on food, golf, gifts, hikes, bikes, a baseball game, and the like.  So, it goes without saying that it was smart to get $300, just to be safe, out of the ATM before the journey and all of the festivities started.  Or, was it?

Eight days later just shy of $275 remained in my pocket.  Cash is king, you know.  Or, at least cash was once king.

So, it got our staff wondering last evening.  Will we see a cashless society in the future?  We think the answer is yes.  It’s when, not if.

And, why not?  Every merchant in brick and mortar and any merchant in the virtual world of any kind takes some or all of Visa, MasterCard, Amex, Discover, PayPal, Venmo, Chase Quick pay, etc.  And, everyone has two or more of these forms of payment in their pocket, purse, or mobile device.

Cards give you rewards or cash back.  Cash gives you pesky change back.  What do you do with your loose nickels and dimes?  Ours are in the console of the truck, or in the luggage that we carried.  Sometimes the dreaded pennies make it into the pocket and all of the way into the house.  Then what?  Then they go into the large jar on the top shelf.  We hope the shelf doesn’t crash down one day from the weight of the copper and silver.

It took America two or three generations to nearly stop smoking altogether.  It’ll took Uber and Lyft about a decade to obliterate the dreadful taxi industry.  How long before cash is all but gone?

About the only need for it is when you directly interact with another citizen in the moment.  A tip for for this, or a ticket scalped outside of a venue come to mind.  Little else does.

So when you cash out, who cashes in?  Visa, MasterCard and PayPal come to mind.   Their build out for electronic processing allows hundreds of thousands of transactions a minute placing them far ahead of rivals mentioned above.  A very recent Barron’s article quoted some industry experts that feel like the electronic processing will continue its percentage growth in the high teens yearly for the next five years and perhaps beyond.

Remember when Apple Pay was going to change the world?  Guess who Apple partnered with to facilitate what they could not?  It’s Visa and MasterCard.  It seems like they are everywhere you want them to be.

Business to business is next.  Cutting checks to pay vendors and such is getting cut by the day.  Who’s there to help?  Yep.  It’s the next big growth vehicle for them.

Banks charge merchants and businesses two or three percent for the privilege of accepting these forms of payment and get paid well to do so.   Consumers win (or at least feel like they do) with one or more percent cash and/or points earned coming back to them.

But the real winners?  Yep.  They collect what seems like a very slim 0.15% of each transaction.  Mere pennies on the dollar you say?  Their shelf is very sturdy.  It has to be.  They collect millions and millions of dollars of pennies every day.

Cash was king.   Visa and MasterCard sit on the highest thrones now.